Masoom KidsFranchise Development Program

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Snapshot on Industry & Masoom Kids

3 CONFIDENTIAL

There is a huge scope for penetration in Indian market for Pre-Schools

Key Takeaways:

Primary Target Customers: Households with annual income in excess of Rs 2 lac/annum are the primary target customers

Growth Potential: Out of estimated 55 lac preschoolers, only 12% are currently enrolled into the pre-schools

Lower Penetration in Indian Market: Concept of pre-schools is still in nascent stage in India as compared to developed part of the world, hence it presents tremendous growth opportunities

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Organized pre-school is driving the growth

Informal Education category: Pre-school segment is a part of the informal education category which primarily caters to children between two and four years

Organized market set to grow: CRISIL research expects the share of the organized market to reach 34% in FY 16 from 11% in FY 10. Major drivers for this are expected to be rising awareness about pre-school education, big expansion plans of existing players and entry of more organized players in to the pre-school market

“Robust growth ahead in underpenetrated pre-school industry”

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Masoom Kids Overview

Masoom Kids is a unique and innovative pre-school based out of Bhubaneswar, committed to deliver high quality of education programs that equip students with a solid foundation in integrated curriculum with technological savvy, methods, materials, and interactions needed to create the environment that leads to enriched learning opportunities for every child

Focus on Stage Exposure, Cultural, Art & Craft, Dance, Indoor & Out Door Activities

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Fully Digital Method of Teaching. CCTV & online surveillance support

Theme & Integrated Based Curriculum. Admission support kit for each curricular

Experienced & Inspiring Facilitators

Weekly/Monthly Interactive Method of Assessment

Specially Designed Life & Behavioral Skills Modules

Only pre-school proving shine leadership program based on life skills and leadership skills

Unique support by providing Shine parenting program for parenting workshops

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Masoom Kids Offerings

Masoom-Group: 1.5 years to 2.5 years

Masoom Junior (KG 1):3.5 years to 4.5 years

Play Center: 2.5 years to 3.5 years

Masoom Senior (KG 2):4.5 years to 5.5 years

Regular Programs

After SchoolPrograms

Masoom Smart Class: Age: 1.5 years to 12 years; Duration: Round the Year

Handwriting & Speaking Class : Age: 2.5 years to 8 years; Duration: Six Months

Shine Leadership Program: Age: 4 years to 12 years; Duration: 3 Months

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Franchise Value Preposition

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Franchising Business Model

Franchise Format (Operations): Franchise Owned Franchise Operated (FOFO)

Area (sq. feet) 2500 – 3000 sq. feet

LocationLocations in vicinity to target residential population, residential locations can be effective

%Royalty 8% on service sales

Exclusive Territory Rights No. But, Area of Primary Rights (APR) for 5-10 km radius can be offered, without any other exclusive rights/privileges

Franchise Format (Territory): Single Unit Franchise

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Recommendations for Franchise Business Model

Marketing Cost 2% of revenues; 1 % each, for local marketing & centralized brand building

Franchise Fee 1.5 lac

Discounting Policy Discounts are not recommended for Franchisee operations

Contract Period 4 + 4 years for both single unit and multi unit franchisee

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Estimated Investment & Returns

3,000 sq. feetArea

Franchise fee: Rs 1.5lac Furnishing & Improvements: Rs 2 – 2.5 lac Equipments & Misc Items: Rs 2 – 2.5 lac Launch Budget: Rs 50,000

Cost Breakup

Rs. 7 lac (approximately)Project Cost

Particulars Y1 Y2 Y3 Y4 Y5Estimated Revenue 1,994,000 2,712,000 3,396,000 4,204,000 5,124,000

Expenses Royalty 150,000 204,000 257,000 320,000 392,000

Employee Cost 618,000 954,667 1,150,533 1,291,200 1,541,333 Operating Expenses 731,680 789,507 837,593 925,724 1,032,808 Marketing Expenses 40,000 54,000 68,000 84,000 102,000

TOTAL COST 1,540,000 2,002,000 2,313,000 2,621,000 3,068,000

PBDIT 454,000 710,000 1,083,000 1,583,000 2,056,000 Depreciation 46,200 46,200 46,200 46,200 46,200

PBT 407,800 663,800 1,036,800 1,536,800 2,009,800 Project cost 700,000

ROI (%) 58% 95% 148% 220% 287%Estimated Payback (Years) 1 Year 5 Months

Estimated Returns

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Targeted Locations for the Rollout

Year 1-3

Cluster 1 – Orissa (Capital & Tier 2 towns)

Cluster 2 – Chhattisgarh, M.P. & A.P. + Telangana (Capital & Tier 2 Towns)

Year 4 -5

Top cities towns in neighboring states (Non-Metros, Capital & Tier 2 towns)

Bhubaneshwar

Rourkela

Cuttack

Brahmapur

Raipur

Visakhapatnam

Durg Bilaspur, etc.

Guntur

Sambhalpur Puri, etc.

Nellore, etc.

Hyderabad Nizamabad Warangal, etc.

U.P., Rajasthan, Haryana region

Maharashtra, Gujarat region

Other Clusters

Bhopal Indore Gwalior, etc.

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Franchisees with similar backgrounds desirable

Franchise with similar background are highly desirable

Preferable Franchisee Partners

Conversion of existing pre-schools

Professionals from education segment Retired Professionals Investors/Women

Entrepreneurs

Essential Features of Preferred Franchisee

Factor Importance

Ability & knowledge to run the business

Very Important

Ease of Conversion Important

Service Sales Capability Very Important

Quality of Delivery Important

Factor ImportanceCustomer Service Very Important

Capital Resources Very Important

Vision Very Important

Comfort Level with Franchisor Important

Network Strength Important

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Procurement of all types of goods e.g. books, dresses, equipments etc to be used for business operations for the Unit franchisee; Efficient vendor and franchisee management expected.

Training programs on a regular basis for Unit Franchisees, teachers and the marketing team.

Provision of all administrative forms & formats and Standard checklists.

Provision of all forms, formats, Cash Sheets, Sales Sheets, Monthly report sheets etc

Assistance in creation of local marketing collaterals and PR activities.

Provision of informative material, presentations, Business and Financial Plans and Operational Manuals

Assistance in organizing of local promotional activities and events.

Printed material like Brochures, Pamphlets, Flex Banners on cost basis

Continuously assist in monitoring and managing the business to make sure that the best business practices get implemented at the franchisee end to run it on profit as well as to have satisfied parents/children.

Take care of quality of services to be delivered at the franchisee end as well as to the end customer (Thorough customer feedback, regular interactions and mystery visit at the franchisee centre)

Franchisor’s Obligations

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Site Selection for the pre school

Fit-outs of the pre school as per franchisor’s specifications

Pre-opening purchases of uniforms, educational aids, teaching material, furniture, cams and playground equipments.

Full Involvement in opening launch promo

Attending initial and ongoing training individually plus key staff

Payment of royalty fees to the franchisor on monthly basis

Compliance with standards and policies/ operating manuals

Compliance of the customer service standards as set by the company

Be adequately insured

Proper maintenance of books and accounts

Follow timely reporting structure of various reports to the franchisor

Will have to ensure smooth flow of business at all times

Unit Franchise’s Obligations

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Pre-Opening Franchise Support extended to the unit franchisee

Comprehensive turn-key assistance from site selection to setup and start operations

Layout and design; architectural support

Pre-opening purchasing assistance

Assistance in organizing of launch promotions

Training

• A comprehensive training is provided to all the Franchisees on center operations, accounting, control etc. Employees from all verticals are being trained on a regular basis which helps to continuously groom and enhancing operating efficiencies of employees.

The franchisor can provide following assistance to its franchisees during this period:

• Organizing all necessary regulatory approvals• Ordering of all equipments for the centre• Negotiation of suitable terms and organizing of lease• Monitoring of fabrication of the centre

All the franchisees are put through a highly focused support system which educates them on utilizing their entrepreneurial skills to become highly efficient and happy franchisees.

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Post-Opening Franchise Support extended to the unit franchisee

Operations Manual

Franchisee Coordinator

Ongoing R & D in the course development and the market development initiatives

Advertising & local promotion:

• The franchisor will organize events specific to marketing of the brand in the region. This will include participation in the related expos/ sponsoring such events, tie ups with magazines/ newspapers etc and much more in collaboration with its business partners to promote its each Franchisee pre school.

Operational support:

• Day to Day operations, Technical & Administrative advices.

Regular advices on management and administrative issues.

Frequent official visits, advices on local promotions programs etc.

Structured Marketing Ideas to suit a location

PR support:

• Regular PR coverage at regional level• Centralized Brand Building through all media - Print, Outdoor, Web, Retail, Electronic.

Major role in ongoing course development and evolvement of the course curriculum of play school

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Thank you

For more detailCONTACT:Asim Khan+91-97178-99644asim@franchisezing.comwww.franchisezing.com